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Archive for the ‘California’ Category

Chexit? Chevron says adios to California after nearly 150 years

Posted in California, decommissioning, energy policy, tagged , , , on February 19, 2025| Leave a Comment »

the early years

Remember that Chevron was once Standard Oil of California. The attached WSJ article discusses the ugly divorce after all these years.

Chevron tired of California’s attempts to dictate corporate strategy. Per Chevron CEO Mike Wirth:

“Putting bureaucrats in charge of centrally planning key segments of the economy hasn’t worked in other socialist states,” Wirth said in a Nov. 1 call with investors. “I doubt it will be any different in California.”

California wanted Chevron to commit to the State’s energy agenda:

“Chevron has a future in clean energy in California. They can join us in our steady, long-term transition to a state powered by clean energy,” said Daniel Villaseñor, a spokesman for the governor’s office.

California wanted the interests of shareholders to be subordinate to the State’s carbon goals:

Newsom said Wirth had invested far more in shareholder payouts than in developing low-carbon energy.

Other State actions that contributed to the divorce:

  • accused Chevron and other companies of price gouging
  • accused Chevron, as a fossil fuel producer, of indirectly causing tragic fires
  • banning the sale of gasoline-powered cars by 2035
  • rules that increased gasoline prices
  • lawsuit alleging climate change deception

Not mentioned in the article are the costly challenges Chevron and others are experiencing in decommissioning offshore platforms.

Chevron CA Divorce 020925Download

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Sable cleared to repair pipeline, Santa Ynez Unit production one step closer but still a steep climb

Posted in California, energy policy, Offshore Energy - General, pipelines, tagged , , , on February 17, 2025| Leave a Comment »

Sable’s stock soared on Thursday following a favorable Santa Barbara County decision (letter pasted below).

Sable’s path is still rocky. Decommissioning specialist John Smith notes that “Sable faces a number of permitting obstacles not to mention litigation by the Environmental Defense Center and others who are committed to trying to stop the SYU restart.  The next hurdle will be a Feb 25 Santa Barbara County hearing on an appeal of the ownership transfer from XOM to Sable.  And we should not overlook the OCS related litigation on ownership transfer, SYU Development and Production Plan updates, and Court ordered prohibition on fracking absent a Fracking EIS and consultation.”

The County’s letter is pasted below. Note the diverse responsibilities of this SBC division: Energy, Minerals, Compliance & Cannabis 😀

Background on the SYU

Santa Ynez Unit posts

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Add the Record of Decision for California decommissioning to DOI’s immediate review list

Posted in California, decommissioning, energy policy, Offshore Energy - General, tagged , , , , , , , on February 13, 2025| Leave a Comment »

PNAS: “among the most productive marine fish habitats globally”

Secretarial Order No. 3418 identified energy policies and regulations requiring immediate Interior Dept. review. A policy decision that should be added to the list is BSEE’s Record of Decision (ROD) for the Programmatic Environmental Impact Statement on Pacific OCS Decommissioning.

Inexplicably, BSEE’s ROD designates the most environmentally harmful, unsafe, and costly alternative as the “preferred alternative.” The decision is contrary to the opinions expressed by the leading experts on the ecology of California offshore platforms, most notably Dr. Milton Love of the University of California at Santa Barbara.

Why did BSEE select alternative 1 (complete removal) when their $1.6 million EIS acknowledges that alternative 2 (partial removal) is environmentally preferable? Was their decision influenced by activists who support the alternative that is most punitive to the industry they despise?

The Interior Dept. needs to immediately review this decision so that stalled decommissioning projects can move forward in a manner that is most efficient and best protects “the most productive marine habitats per unit area in the world.”

beneath Platform Gilda, Santa Barbara Channel

“On December 7, 2023, the Bureau of Safety and Environmental Enforcement (BSEE) issued a Record of Decision (ROD) recommending the full removal of California’s 23 offshore oil platforms in federal waters, following a Programmatic Environmental Impact Statement (PEIS) conducted to assess decommissioning options for platforms, pipelines, and other related infrastructure. However, upon close review, the PEIS and ROD appear to have reached misguided and detrimental conclusions due to critical oversights in their analyses.” Asher Radziner, Montecito Journal

More posts on California decommissioning

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California fires

Posted in California, Uncategorized, tagged , on February 8, 2025| Leave a Comment »

My friends and former colleagues in Southern California do not live in areas that were devastated by the recent fires.

However, Nabil Masri, one of our outstanding petroleum engineers, sent this picture taken from his driveway in Camarillo during the “Mountain Fire” in November. His home was in an evacuation warning area, and the family was packed and ready to go. Fortunately, things improved and they did not have to evacuate.

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Outstanding non-political Keith Morrison commentary on the LA fires

Posted in California, Uncategorized, tagged , , on January 13, 2025| Leave a Comment »

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President Biden’s offshore leasing ban dwarfs all other Sec. 12(a) withdrawals. It may be difficult to reverse.

Posted in Alaska, California, decommissioning, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , on January 7, 2025| Leave a Comment »

As expected, the White House announced the largest ever permanent ban on offshore oil and gas leasing in the US, and to the best of my knowledge, anywhere in the world.

The sheer magnitude of the ban makes other such withdrawals appear modest by comparison. It’s amazing how bold Presidents (and their handlers) become when they are about to leave office.

The permanent ban includes:

  • The entire Atlantic Outer Continental Shelf (OCS): While there are no current oil and gas leases in the US Atlantic, the region is highly prospective and could contain more than 20 billion barrels of oil equivalent (BOE).
  • The Eastern Gulf of Mexico: This is the OCS area that many petroleum geologists find most attractive. The best prospects are >100 miles from shore which minimizes coastal risks, and the high natural gas potential aligns with Florida legislation supporting the use of gas for power generation.
  • The entire Pacific OCS: While the resources are substantial, their loss has been a foregone conclusion for 25 years. When you can’t even decommission old platforms or restore production on important existing facilities (i.e. the Santa Ynez Unit), how can you possibly expect to issue new leases?
  • The remainder of the OCS offshore western Alaska. The wishes of the majority of Alaskans, who support offshore exploration and development, have been largely ignored for decades.

President-elect Trump has vowed to reverse President Biden’s leasing ban, but that may not be so easy. This is not a matter of simply reversing an executive order. Sec. 12(a) of OCSLA grants the authority to withdraw lands to the President and does not provide for reversal by future Presidents. The attached NYU Law brief concludes that “a subsequent president lacks authority to restore previously withdrawn lands to the federal oil and gas leasing inventory.”

The new Administration will no doubt have a different view than that expressed in the NYU Law brief, but any reversal decision will likely be challenged in court.

Those who wrote and approved Sec. 12(a) should have had more foresight. However, 72 years ago the authors presumably thought Presidents would only use the authority to remove small, especially sensitive areas from leasing consideration, and never thought that a President would remove both of our oceans and much of the Gulf of Mexico!

Congress could of course reverse the Biden bans, but given the complexity of offshore energy issues, such legislation may be difficult to pass.

Leske-FINALDownload

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Rigs to Reefs!

Posted in California, decommissioning, Offshore Energy - General, rigs-to-reefs, tagged , , , , , , on November 22, 2024| Leave a Comment »

Attached is an excellent Scientific American article featuring BOE contributor and decommissioning specialist John Smith, former colleague and marine biologist Dr. Ann Bull, and Dr. Milton Love, the leading authority on California’s offshore platform ecosystems.

I had the pleasure of taking a highly informative boat tour around Platform Holly with Dr. Love and a group of international visitors. Holly, which is pictured at sunset in the BOE header, is among the platforms awaiting decommissioning.

Dr. Love on the total removal of California offshore platforms:

“As a biologist, I just give people facts,” he says. “But I have my own view as a citizen, which is: I just think it’s criminal to kill huge numbers of animals because they settled on a piece of steel instead of a rock.”

The Afterlives of Oil RigsDownload

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Another small step toward the resumption of Santa Ynez Unit production

Posted in California, energy policy, Offshore Energy - General, Regulation, tagged , , , , , , on November 11, 2024| Leave a Comment »

The Santa Barbara County Planning Commission has approved the transfer of the onshore pipeline from Exxon to Sable Offshore. Although the Environmental Defense Center (EDC) is appealing that decision to the Board of Supervisors, the Board’s vote will likely be a 2-2 tie. Supervisor Hartmann’s property is close to the pipeline and she has recused herself from votes on the matter. A 2-2 vote would be a win for Sable, because a tie vote means the planning commission decision stands.

As an investment, Sable is a “pure California permitting play,” which means the risks are high. The company’s chances for success are almost entirely dependent on receiving the necessary approvals from State and local agencies.

If Sable is able to navigate the permitting gauntlet, the company’s prospects are good. The Santa Ynez Unit, Sable’s only asset, has substantial oil and gas resources and well-maintained production facilities.

Sable’s share price soared to $23.43 on 9/3 after the company reached agreement with Santa Barbara on the installation of required pipeline valves. The price bounced further to $28.30 on 9/19 before falling sharply to $19.43 on 10/9 after being cited for failing to get California Coastal Commission approval to install the required valves. The price rebounded to $24 following the County Planning Commission’s approval of the transfer from Exxon to Sable before settling at $23 on Friday, the date of the EDC appeal.

Expect the financial and psychological roller coaster ride to continue.

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Will the Chumash Marine Sanctuary designation further complicate California OCS decommissioning? Santa Ynez Unit production restart?

Posted in California, decommissioning, Offshore Energy - General, Regulation, tagged , , , , , on October 23, 2024| Leave a Comment »

Almost 40 years ago, four large oil and gas platforms were installed in the beautiful offshore area that was part of our Santa Maria District (Pacific Region of the Minerals Management Service). Those platforms are now within the boundaries of the Chumash Heritage National Marine Sanctuary (see map above).

We watched those platforms being installed, inspected the drilling and production operations, and performed a myriad of other duties including the curtailment of offshore operations prior to launches from Vandenberg AFB. Those Vandenberg launches weren’t always perfect as this link clearly demonstrates. Even knowing that, it was still a bit unnerving when missiles were recovered during post-abandonment site clearance trawls.

All four of those Santa Maria District platforms are now on terminated OCS leases. All were installed by companies that are now part of Chevron Corp. (Chevron, Texaco, and Unocal). They are currently maintained by Freeport-McMoRan Oil & Gas, with Chevron retaining financial responsibility for decommissioning.

PlatformInstall yr.installed bywater depth (ft)Est. removal weight (short tons)wells drilled
Harvest1985Texaco67535,15019
Hermosa1985Chevron60330,86813
Hidalgo1986Chevron43023,38414
Irene1985Unocal2428,76226

BSEE reports that the 46 wells on Harvest, Hermosa, and Hidalgo have been plugged and tested, and that the well conductors have been removed. No information has been posted on the status of the wells at Platform Irene, but presumably they are (or will soon be) plugged in accordance with BSEE regulations.

Will the inclusion of these platforms in the Chumash Marine Sanctuary further complicate the already difficult decommissioning process? Decommissioning specialist John Smith thinks it may:

“In addition to the BOEM and BSEE approval process, Chevron and FMC are going to be dealing with the NOAA permitting regime for Sanctuaries.  Those permitting and environmental compliance requirements are extensive.  NOAA’s NEPA documentation for West Coast marine sanctuaries will also need to be amended to include the Chumash.”

So the “Mission Impossible” that is California OCS decommissioning now has yet another complex regulatory element.

John also thinks the Sanctuary designation presents yet another obstacle for Sable’s plans to restart Santa Ynez Unit production:

“Even though most of the SYU facilities are outside the Sanctuary, the proximity of the operations to the Sanctuary is problematic. The Chumash are now going to be a co-manager of the Sanctuary, adding another player in the process.   Sable is going to obtain multiple Federal, State and local permits to restart SYU, and law suits are likely at every stage of the process.” 

BOE will be watching!

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Hywind turbine maintenance completed; Equinor declares victory. California time frame?

Posted in California, Norway, Offshore Wind, UK, tagged , , , , , , on October 22, 2024| Leave a Comment »

Hywind Scotland, Equinor

Equinor reports that all 5 Hywind turbines have been returned to service after being towed to Norway as part of a 4-month maintenance campaign.

Even though the turbines had only been in operation since 2017, Equinor puts a positive spin on the 4-month maintenance outage, declaring total victory:

“The successful completion of the maintenance campaign on Hywind Scotland is a testament to the collaborative efforts of our teams and partners. As the world’s first floating offshore wind farm, Hywind Scotland has demonstrated the immense potential of floating wind. Through this maintenance campaign, we’ve gained valuable insights that will help us refine maintenance practices and optimise this technology for the future. By sharing our learnings, we aim to contribute to the growth and development of the floating wind industry.”

Some of the folks in Scotland have a different take as evidenced in this video:

Meanwhile, the turbines planned for offshore Central California will also have to be towed to shore for major maintenance. Nearby harbor areas like Morro Bay (pictured below) would be overwhelmed by the large structures and the maintenance and repair operations. Central Coast residents are not enamored with “another attempt to industrialize the coast.” Towing the towers to LA/Long Beach, albeit rather distant from the leases, would seem to be the preferred option for such work.

Looking forward, the first power generation from floating wind turbines on the Central Coast is forecast for 2034. Betters may want to take the over!

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